Six new oil mining contracts awarded<\/p>\n
JAKARTA (JP): Minister of Mines and Energy Kuntoro
\nMangkusubroto awarded six new oil and gas production sharing
\ncontracts yesterday and reassured foreign investors that their
\nagreements would be honored.<\/p>\n
The six contractors, including five foreign companies, were
\nawarded the right to explore oil and gas resources in Irian Jaya,
\nthe Natuna Islands and East Java for 30 years.<\/p>\n
The contractors are Japan Petroleum Exploration Co. Ltd
\n(JAPEX), Lasmo (Malagot) Ltd. of Britain, YPF South Sokang Ltd,
\nGulf Resources Ltd of Canada, Total of France and one local
\ncompany, Wirabuana Pan Resources.<\/p>\n
\"I want to assure contract signatories that you are dealing
\nwith an honorable government. Once we sign a contract, we will
\nrespect it,\" he said.<\/p>\n
\"I don't want to hear of any official in the Ministry of Mines
\nand Energy annulling a contract on the grounds that he was
\ncoerced to sign the contract. Contract annulment is wrong in
\nterms of law and ethics.\"<\/p>\n
Kuntoro made the statement amid growing concern among
\nindependent power generators (IPP) following a move by the State
\nElectricity Company (PLN) to unilaterally annul its power
\npurchase contract with PT Cikarang Listrindo, which is partly
\nowned by former president Soeharto's cousin Sudwikatmono.<\/p>\n
PLN's president Djiteng Marsudi annulled the contract after
\nthe company refused to renegotiate the contractual terms to
\nalleviate the electricity company's financial distress amid the
\nmonetary crisis.<\/p>\n
Djiteng said the company could not afford Cikarang's power
\nrate and claimed PLN was coerced to sign the contract with the
\ncompany in the past.<\/p>\n
He also declared that PLN was pressured to sign contracts with
\nmost of the IPPs.<\/p>\n
Kuntoro said yesterday a contract could be reviewed but it
\nshould be conducted in compliance with the law.<\/p>\n
Kuntoro has asked Pertamina to review all contracts awarded to
\nSoeharto's family and cronies, but he noted yesterday he would
\nonly weed out those which \"are legally flawed, and possibly not
\nlegally flawed but are making Pertamina inefficient\".<\/p>\n
Kuntoro also said the government subsidy for fuel this fiscal
\nyear might reach Rp 35 trillion, against the earlier projection
\nof Rp 9.5 trillion, if the rupiah's exchange rate remained at Rp
\n11,000 against the American dollar.<\/p>\n
He said the Rp 9.5 trillion subsidy was based on the
\nassumption of an exchange rate of Rp 6,000.<\/p>\n
The subsidy would increase by Rp 5 trillion for every decrease
\nof 1,000 in the rupiah's value against the dollar, he added.<\/p>\n
JAPEX's contract covers 2,757 square kilometers on the Semirak
\nBlock offshore Irian Jaya, YPF South 11,250 sq km in the Sokang
\nBlock offshore the Natuna Islands; Lasmo 4,235 sq km on the
\nMalagot Block offshore Irian Jaya.<\/p>\n
Gulf landed a contract to explore oil and gas on 4,433 sq km
\non the Ketapang Block off the northern part of Madura Island;
\nTotal 6,865 sq km on the Walo Block offshore Irian Jaya and
\nWirabuana 4,000 sq km on the Karapan Block offshore East Java.<\/p>\n
Pertamina's exploration and production director Priyambodo
\nMulyosudirdjo said the new contractors pledged to invest US$318
\nmillion in exploration and development activities during the
\nfirst 10 years of their contracts.<\/p>\n
They were also committed to pay $9.1 million each to Pertamina
\nas compensation for information on their concessions.<\/p>\n
The new deals brings the number of oil and gas exploration and
\nproduction sharing contracts awarded this year to 12.<\/p>\n
The government awarded a record of 29 oil and gas contracts
\nlast year. (jsk)<\/p>",
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